Oliver Bullough: What is Britain's Role in the Global Dirty Money Crisis?

Bristol Ideas
13 Jun 202255:42

Summary

TLDRIn this thought-provoking discussion, Oliver Bullough joins Andrew Kelly to delve into the intricacies of Britain's transformation into a 'butler' to the world's tycoons, tax dodgers, kleptocrats, and criminals. Drawing on his new book, Bullough explores how the UK's financial industry has facilitated the movement and obfuscation of illicit wealth, often at the expense of transparency and ethical standards. He discusses the historical context, from the post-Empire era to the modern-day implications on global politics and society, including the impact of the Suez Crisis and the rise of offshore financial centers. Bullough also highlights the need for increased resources for law enforcement and a cultural shift in attitudes towards the origins of wealth, advocating for a more proactive approach in combatting financial crime and corruption.

Takeaways

  • ūüďĖ The book 'Butler to the World' by Oliver Bullough discusses Britain's role in facilitating financial crimes and the global elite's exploitation of the UK's financial system.
  • ūüŹį London's property market and other UK territories provide a gateway for foreign wealth, often obtained through dubious means, to be laundered and legitimized.
  • ūüöĆ The 'kleptocracy tour' highlights the ownership of London properties by foreign oligarchs and corrupt politicians, emphasizing the need for transparency in property ownership.
  • ūüé© The concept of 'butlering' is introduced as a metaphor for Britain's service to the global elite, mirroring the role of Jeeves in P.G. Wodehouse's stories, but with a darker, real-world implication.
  • ūüíľ The British Virgin Islands (BVI) and other overseas territories have become hubs for shell companies and financial secrecy, aiding in global corruption and tax evasion.
  • ūüáļūüá≤ The US lawyers' exploitation of the BVI for tax avoidance demonstrates the global nature of financial crime and the ease with which regulatory loopholes can be exploited.
  • ūüá™ūüáļ The Eurodollar market and the City of London's regulatory environment have been pivotal in the transformation of financial services post-World War II.
  • ūü§Ě The relationship between the UK and Russia, particularly through individuals like Dmitry Firtash, showcases the UK's complicity in the enablement of kleptocratic wealth.
  • ūüö® The discussion underscores the importance of resourcing and empowering law enforcement and investigative bodies to tackle financial crimes effectively.
  • ūüďö The book calls for a reevaluation of Britain's historical role as an empire and its current role as a 'butler', suggesting a need for a more critical approach to understanding the UK's global impact.
  • ūüĆć The invasion of Ukraine serves as a potential catalyst for change in the UK's approach to financial crimes, with increased recognition of the country's role in global corruption networks.

Q & A

  • What is the main theme of Oliver Bullough's book, 'Butler to the World'?

    -The main theme of Oliver Bullough's book is how Britain has become a service provider to wealthy individuals, including tycoons, tax dodgers, kleptocrats, and criminals, by facilitating financial crimes and hiding the ownership of assets through complex financial structures and offshore entities.

  • How does the kleptocracy tour in London work?

    -The kleptocracy tour in London is a guided bus tour that aims to expose the properties in the city owned by wealthy individuals with questionable wealth sources. The tour starts near Portcullis House, passing by various properties owned by figures such as Russian oligarchs and Ukrainian businessmen, highlighting how these individuals use London real estate to hide their wealth.

  • What is the significance of the term 'butlering' in the context of Oliver Bullough's argument?

    -In the context of Oliver Bullough's argument, 'butlering' refers to the services provided by Britain to facilitate financial crimes and help wealthy individuals hide their assets and avoid taxes. The term is used as an analogy to describe Britain's role in catering to the needs of these clients, much like a butler serves their master.

  • How did the concept of 'offshore' originate?

    -The concept of 'offshore' originated when the Soviet Union decided not to keep their dollars in New York due to fears of asset freezing by the US authorities. Instead, they chose to keep their dollars in London, which led to the discovery of a loophole where using dollars outside the US provided all the benefits of the currency without the restrictions, thus creating a 'law-free space' or 'offshore' territory.

  • What role did the Suez Crisis play in the transformation of the City of London?

    -The Suez Crisis led to a moment of humiliation for Britain as it attempted to assert its power and failed. During this crisis, the British Treasury imposed strict restrictions on the use of pounds, which forced the City of London's merchant banks to find alternative financing methods. They discovered that by using dollars, they could bypass these restrictions and thus the City of London was reborn as the financial hub serving the global financial elite.

  • How did Gibraltar become a major center for online gambling?

    -Gibraltar became a major center for online gambling after realizing that it could offer a tax-free and regulation-free environment for betting companies. This attracted major British-based bookies to move their telephone betting operations to Gibraltar, which in turn led to a significant change in how gambling was taxed and regulated in the UK, leading to the explosion of online gambling.

  • What is the impact of the British Virgin Islands (BVI) shell companies on global wealth hiding?

    -The BVI shell companies have had a significant impact on global wealth hiding by providing an opaque legal structure that allows individuals and entities to hide their wealth and financial activities from scrutiny. This has been used by various groups, including drug smugglers, businesspeople fearing political changes, and corrupt politicians, to hide their assets and evade taxes.

  • What is the significance of the Scottish limited partnership (SLP) in money laundering?

    -The Scottish limited partnership (SLP) is a legal entity that has been exploited for money laundering due to its opacity, tax-free nature, and ability to own property and move money. It has been used in major financial scandals, including defrauding Moldova of a significant portion of its GDP and facilitating large-scale money laundering through Baltic banks.

  • What are the consequences of Britain's role as a 'butler' to the global financial elite?

    -The consequences of Britain's role as a 'butler' include facilitating corruption, tax evasion, and wealth inequality. It has also contributed to the rise of kleptocratic regimes, such as Russia's, by integrating stolen wealth into the global financial system. This has led to significant social and political issues, including the invasion of Ukraine and the empowerment of corrupt leaders.

  • What measures can be taken to address the issues highlighted in Oliver Bullough's book?

    -To address the issues highlighted in the book, measures such as resourcing and empowering law enforcement agencies to investigate financial crimes, implementing anti-SLAPP laws to protect journalists and civil society organizations from abusive litigation, and promoting a culture of moral responsibility among private sector organizations and academia are necessary. Additionally, there should be a shift in focus towards understanding and confronting the history of empire and its impact on the current financial systems.

  • How does Oliver Bullough view the potential for change following the invasion of Ukraine?

    -Oliver Bullough believes that there will be change as a result of the invasion of Ukraine, but he views it as an incremental process. He highlights the importance of taking small steps towards improvement, such as better protections for journalists, regulation of Companies House, and increased debate about the Empire and Britain's role as a 'butler'. He emphasizes the need for optimism and the use of knowledge to expose and combat money laundering.

Outlines

00:00

ūüĆć Introduction and Background of Oliver Bullough's Work

This paragraph introduces the speaker, Oliver Bullough, a journalist and writer known for his works on the former Soviet Union and the book 'Butler to the World: How Britain Became the Servant of Tycoons, Tax Dodgers, Kleptocrats and Criminals.' The discussion revolves around the concept of a kleptocracy tour in London, highlighting how such tours aim to reveal the ownership of luxurious properties in the city by foreign oligarchs and other influential figures, thus raising awareness about the nexus between wealth and power.

05:05

ūüďö The Analogy of 'Butlering' and its Implications

In this segment, Oliver Bullough delves into the concept of 'butlering,' drawing parallels with P.G. Wodehouse's character, Jeeves. He argues that beneath the charm and humor, Jeeves is a character who would do anything for money, reflecting the amoral nature of Britain's financial elite who facilitate financial crimes. Bullough discusses how Britain's role in the global financial system has evolved from an empire to a 'butler' serving the interests of wealthy individuals, regardless of their origins or the legality of their wealth.

10:09

ūüöĘ The Historical Shift from Empire to 'Butler'

This paragraph discusses the historical transition of Britain from being an empire to assuming the role of a 'butler' to wealthy oligarchs and kleptocrats. Bullough explains how Britain's financial sector discovered the benefits of using dollars for international transactions, leading to the creation of a law-free space termed 'offshore.' The Suez Crisis and its aftermath are highlighted as pivotal moments that marked the end of British imperialism and the beginning of a new era where London became a hub for offshore finance, thus setting the stage for the 'butlering' industry.

15:12

ūüé≤ The Impact of Gibraltar's Online Gambling

This section focuses on Gibraltar's transformation into a major center for online gambling. Bullough explains how one individual's idea in Gibraltar led to the establishment of a telephone betting operation that eventually attracted major British bookies. The move to Gibraltar allowed these companies to avoid high taxes and regulations in the UK, resulting in significant financial and regulatory advantages. This shift had profound effects on the British government's tax revenue and gambling regulations, leading to an explosion of online gambling and associated social issues.

20:13

ūüŹ¶ Exploiting Financial Loopholes in Jersey and the BVI

In this part, Bullough discusses how Jersey and the British Virgin Islands (BVI) have exploited their financial systems to attract wealthy individuals and companies seeking to avoid taxes and regulations. Jersey's shift from agriculture to finance is highlighted, as well as the BVI's creation of an opaque shell company system that has been utilized globally for various illicit activities. The narrative underscores how these territories have profited from offering legal structures that facilitate the concealment of wealth and the avoidance of scrutiny.

25:15

ūüĒí The Role of Scottish Limited Partnerships in Money Laundering

This segment addresses the misuse of Scottish limited partnerships (SLPs) in global money laundering schemes. Bullough explains how an obscure aspect of British legislation was exploited by Eastern European money launderers, leading to significant financial scandals and the defrauding of countries like Moldova. Despite efforts to close this loophole, it remains open due to pressure from private equity firms that also value the anonymity and tax benefits offered by SLPs, illustrating the tension between combating corruption and maintaining business interests.

30:17

ūüŹį The Case of Dmitry Firtash and the Brompton Road Tube Station

This paragraph details the rise of Ukrainian oligarch Dmitry Firtash and his connections to Russia's control over Ukraine through the gas trade. Firtash's acquisition of a former Tube station in London and his social and political influence in the UK are highlighted. However, his indictment by the FBI on corruption charges and the subsequent legal battle in Vienna are also discussed, emphasizing the contrasting approaches of the US and UK in dealing with wealthy individuals with questionable wealth sources.

35:22

ūüďą The Need for Empowering Law Enforcement and a Reevaluation of Empire

In this concluding segment, Bullough advocates for increased resources and authority for law enforcement agencies to effectively investigate and combat financial crimes. He criticizes the UK's approach to wealthy individuals, emphasizing the need for proactive investigations and the return of stolen wealth to its rightful owners. Additionally, he calls for a reevaluation of the UK's imperial history and its impact on the present-day 'butlering' role, arguing for a more comprehensive understanding and debate around these issues.

40:25

ūüĆü Final Thoughts and the Importance of Optimism

Oliver Bullough shares his optimism for the future and the potential for change, despite the challenges. He highlights the incremental progress made, such as the introduction of the Economic Crime Act and discussions around supporting journalists who expose corruption. Bullough emphasizes the importance of taking small steps towards change and remaining hopeful for a better future, free from the scourge of money laundering.

Mindmap

Keywords

ūüí°kleptocracy

Kleptocracy refers to a form of government where the ruling class exploits the country's resources for personal gain. In the context of the video, Oliver Bullough discusses how London has become a hub for kleptocrats, individuals who have amassed wealth through corrupt means, often from former Soviet countries.

ūüí°tax dodging

Tax dodging involves the practice of legally minimizing tax liability or deceiving the tax authorities to reduce tax payments. In the video, it is discussed as a key activity facilitated by the British financial system for wealthy foreign individuals, often through complex corporate structures and offshore accounts.

ūüí°shell companies

Shell companies are corporations without active business operations or significant assets, often used as vehicles for various financial maneuvers, including tax evasion and money laundering. In the video, Bullough describes how shell companies are used to disguise the ownership of high-end properties in London and elsewhere.

ūüí°offshore

Offshore refers to financial activities conducted outside the country where the transactions or investments are based, often in jurisdictions with low or no tax rates. In the video, the term is used to describe how Britain has become a center for offshore financial services, facilitating wealth management for the global elite.

ūüí°butlering

In the context of the video, 'butlering' is a term used to describe the services provided by Britain to facilitate the financial activities of wealthy individuals, regardless of the origins of their wealth. It implies a subservient role, catering to the needs of oligarchs and others who wish to hide or protect their assets.

ūüí°Eurodollars

Eurodollars are US dollars held in banks outside the United States, which are used in international transactions. They are significant because they operate outside the direct control of the US financial regulatory system. In the video, Eurodollars are discussed as a key component of the offshore financial system that allows for the creation of a law-free space for financial transactions.

ūüí°corruption

Corruption refers to the abuse of power for personal gain, especially in the context of government or other public institutions. In the video, corruption is a central theme, with the author discussing how Britain's financial system enables and profits from corruption perpetrated by foreign elites.

ūüí°anti-corruption activist

An anti-corruption activist is an individual who works to expose, combat, and prevent corruption, often within governmental or financial systems. In the video, the mention of Roman Borisovich, a former banker turned anti-corruption activist, illustrates the role of activists in raising awareness about the issues of corruption and financial malpractice.

ūüí°financial crime

Financial crime encompasses a range of illegal activities that involve the use of financial systems or markets for unlawful gains, such as money laundering, fraud, and embezzlement. In the video, the author discusses how Britain has become complicit in facilitating financial crimes for the global elite.

ūüí°global elite

The global elite refers to a group of individuals who hold significant wealth and power on an international scale. In the context of the video, the global elite are the clients of Britain's financial services, utilizing the system to protect and grow their wealth, often with disregard for ethical or legal considerations.

ūüí°Economic Crime Act

The Economic Crime Act is a piece of legislation aimed at combating economic crimes such as money laundering, fraud, and corruption. In the video, it is mentioned as a potential legislative response to the issues of financial crime and corruption, particularly in the wake of the invasion of Ukraine.

Highlights

Oliver Bullough discusses the UK's role in facilitating financial crimes and the global implications of 'butlering' for oligarchs, kleptocrats, and criminals.

The 'kleptocracy tour' in London reveals the properties of foreign tycoons and highlights the UK's involvement in global financial corruption.

Bullough's use of P.G. Wodehouse's Jeeves as an analogy to illustrate the UK's complicity in enabling financial crimes.

The historical shift from the British Empire to the 'Butler Britain' and its role in offshore financial services.

The impact of the Soviet Union's decision to store dollars in London, leading to the creation of a 'law-free space' and the birth of offshore banking.

The transformation of the City of London from the engine of the British Empire to the engine of the financial elite.

Gibraltar's role in the rise of offshore gambling and its influence on the global gambling industry.

The British Virgin Islands (BVI) and its development into a hub for shell companies, attracting global corruption and tax evasion.

The Scottish Limited Partnerships' use in money laundering and the failure to close this legal loophole despite efforts by Scottish politicians.

The purchase of a former Tube station on Brompton Road by Ukrainian oligarch Dmitry Firtash, exemplifying the UK's acceptance of illicit wealth.

The need for better resourcing and empowerment of law enforcement agencies to investigate and combat financial crimes.

The challenges faced by journalists in investigating and reporting on financial corruption due to legal and financial pressures.

The importance of understanding and learning from the British Empire's history to address the current issues of financial corruption.

The potential for positive change following the invasion of Ukraine, including increased awareness and legislative action against financial crimes.

Bullough's call for an incremental approach to tackling financial corruption, focusing on small steps and progress rather than overwhelming challenges.

Transcripts

play00:09

ANDREW KELLY: Hello, and welcome to Bristol  Ideas. I'm Andrew Kelly and I'm talking to  

play00:13

Oliver Bullough about his new book, Butler to the  Word: How Britain Became the Servant of Tycoons,  

play00:20

Tax Dodgers, Kleptocrats and Criminals.  Oliver is a journalist and writer,  

play00:26

author of two books about the former Soviet Union,  The Last Man in Russia and Let Our Fame Be Great,  

play00:32

and Moneyland: Why Thieves and Crooks Now Rule  the World and How to Take it Back. This event  

play00:38

is part of our ongoing work on the future of  democracy. Thank you for joining us, Oliver.  

play00:42

OLIVER BULLOUGH: It’s my  pleasure. Thanks for having me.  

play00:44

ANDREW: It’s said by many reviewers, and as I was  reading this it occurred to me as well, that this  

play00:48

is an incredibly timely book for reasons we'll be  discussing. But you've been pursuing these stories  

play00:54

and these ideas and these issues for a while,  even running special tours in London. What might  

play01:00

you see on a kleptocracy tour in London? OLIVER: Well, the kleptocracy tour was not  

play01:06

my idea ‚Äď I wish it was ‚Äď it was the idea of my¬† friend, Roman Borisovich. He was a Russian-born¬†¬†

play01:12

former banker turned anti-corruption activist.  The idea is modelled on the Hollywood  

play01:19

celebrity tour. I think the problem that you  have in Hollywood and the problem you have in  

play01:24

London is essentially the same in that you can  drive around the Hollywood Hills and see all  

play01:28

of these mansions and one mansion kind of looks  quite a lot like another mansion, just like one  

play01:33

luxury, beautiful, detached house in Highgate  or a townhouse on Eaton Square looks much like  

play01:39

another one. How do you know which ones belong  to Scarlett Johansson in Hollywood or to Oleg  

play01:46

Deripaska or another oligarch in in London? So essentially what we do is we put people on a  

play01:51

bus ‚Äď we normally pick people up on the¬† Embankment, just near Portcullis House,¬†¬†

play01:58

the sort of annex of Parliament, because the  Russian former deputy prime minister has a  

play02:03

really lovely duplex apartment overlooking  the River Thames, just looking south.  

play02:08

There's a nice garden in front of it and then the  Thames and then you look down towards Vauxhall.  

play02:15

We pick people up there and normally pile into  the bus, and then, essentially, where we go next  

play02:20

slightly depends on the whims of the guides. There  are about five or six of us who act as guides and  

play02:29

normally we take in a Tube station that belongs  to a Ukrainian oligarch, Dmitry Firtash,  

play02:34

just because I like the fact that he owns¬† a tube station. I say ‚Äėlike‚Äô ‚Äď appalled by,¬†¬†

play02:39

but you know what I mean. And then we might go up  through St John's Wood where there's a big house  

play02:44

that belongs to the former head of Russian  Railways. And if the traffic isn't too bad,  

play02:48

we'll go to Highgate where Witanhurst, the second  biggest house in London after Buckingham Palace,  

play02:52

belongs to a Russian fertiliser magnate. We don't only do Russians. If we have the guides  

play02:58

available, we might do Nigerians, Egyptians,  Malaysians… London is famously the home of the  

play03:06

Russian billionaires but we're equal opportunity  when it comes to taking money. We're not  

play03:09

just ‚Äėbutler‚Äô to the Russians, we‚Äôre butler to¬† the world. So essentially, anyone who's anyone¬†¬†

play03:16

and has enough money will buy property  in London and we like to show that,  

play03:21

the idea being to try and cut through the webs of  shell companies and so on that disguise ownership  

play03:28

of top-end property and just say, look who  owns our capital city. Normally, I think,  

play03:40

after an afternoon or morning in a bus ‚Äď we can¬† show five or six properties ‚Äď normally people¬†¬†

play03:44

are pretty appalled. And I think we've had a  small but not insignificant amount of success  

play03:53

in trying to change the conversation about  foreign direct investment in Britain,  

play03:59

and whether perhaps we should be a bit more  discriminating about who we take money from.  

play04:03

ANDREW: Certainly, it's an important book that  you've written, and one that we can all learn  

play04:11

so much from. I want to come back to the Tube  station, actually, because I think that's really  

play04:15

a critical part of the book. But let's talk about¬† ‚Äėbutlering‚Äô just for a moment, because you have¬†¬†

play04:21

some fun in the book ‚Äď P G Wodehouse,¬† Jeeves ‚Äď but I thought it was a very¬†¬†

play04:27

apt analogy, in fact, the way you used it. OLIVER: Yes, I did actually try to, as it were,  

play04:34

embed myself with real butlers. I had this sort  of idea that I could write about butlers and  

play04:39

maybe perhaps go through butler training myself.  But they rumbled me quite quickly, that I wasn't  

play04:47

a would-be butler but was in fact a journalist who  writes about financial crime, and the invitations  

play04:53

just dried up. I wasn't able to do that. But  I wanted to structure the book around examples  

play05:00

of butlering. And so, obviously, I turned to  Jeeves, though people regularly point out that he  

play05:05

was in fact a valet, rather than a butler. But  it's just a different word for the same thing,  

play05:09

really. And what was interesting about reading the¬† P G Wodehouse books again ‚Äď I‚Äôve read them many¬†¬†

play05:16

times and loved them ‚Äď is that I'd never really¬† realised quite how dark a character Jeeves is. If¬†¬†

play05:23

you cut past the humour and the amazing way that  P G Woodhouse writes, he is essentially prepared  

play05:31

to do anything for money. He bribes a policeman¬† at one point, or he gives him ‚Äėa little present‚Äô,¬†¬†

play05:38

as he puts it. He knocks a policeman unconscious,  he sets up an illegal bookmaking ring, he uses  

play05:44

inside information for political advantage. He’s  a really amoral human being. And actually, all of  

play05:51

those things are essentially kind of what Britain  does on behalf of its oligarchic clients.  

play05:58

Jeeves turned out to be a really useful guide  through the enabling of financial crime. That  

play06:04

essentially, if you cut past the immaculate  tailoring and the cut-glass accents, the British  

play06:12

elite behaves in exactly the same way as Jeeves  does, and just takes money from anyone in order  

play06:17

to help them get away with anything. And that  goes right back to the early post-Empire days,  

play06:27

right up to the present. And it involves the  use of shell companies to disguise property,  

play06:34

the use of lawyers to help people obfuscate  their crimes, get away with their crimes,  

play06:40

intimidate journalists, buy top-end property.  And it's a deeply troubling industry, that I  

play06:50

think in the same way that Jeeves’ actions  are when you read the P G Wodehouse books,  

play06:53

you just don't notice how dark they are because  of the Marcus Aurelius quotes and so on that  

play06:58

surround them. If you look at what Britain  does, and strip away the old Etonian charm,  

play07:04

it's just being a conciliary to a mafia Don,  really, but just with better tailoring.  

play07:12

ANDREW: At the end of the book, you even  give us the prices for what we might  

play07:19

pay to learn certain butlering skills  which I thought was a wonderful moment.  

play07:24

Let's talk about Suez where your argument starts,  and the national disaster and embarrassment that  

play07:34

was. You mention Dean Acheson and his famous early  1960s statement about Britain’s lost empire.  

play07:36

OLIVER: Yes, it’s a really interesting, in  a way, thought experiment, because obviously  

play07:43

Britain didn't used to be a butler.  Britain used to be the oligarchy,  

play07:47

right? What Vladimir Putin is doing to Ukraine  now, that's kind of what we used to do to places.  

play07:54

In the Boer War, we wanted to sell Africa’s gold  so we attacked them and took it. If we didn't  

play08:01

like a country’s trade policy, we would just  bombard them with battleships until they changed  

play08:05

their mind. That's what Britain used to do. We don't do that anymore. When did we stop? And  

play08:10

when did we instead start helping other people  do those things? That's the question. And  

play08:16

there is this really fascinating moment which  slightly predates the Suez Crisis but sets up  

play08:24

the context of when butlering begins, which is  in 1955, when the Soviet Union decided that they  

play08:31

didn't want to keep their dollars in New York.  Dollars were crucial if you wanted to trade with  

play08:36

the international currency as established by  the sort of United Nations at the end of the  

play08:41

Second World War ‚Äď you had to have dollars.¬† But they didn't want to put them in New York¬†¬†

play08:45

because they were worried they would be frozen  by the US authorities in the event of a crisis.  

play08:49

So instead, they put them in London. They owned  a bank in London, the Moscow Narodny bank,  

play08:54

and they kept them there. But what were they to  do with them? Well, they lent them to a British  

play09:00

bank. And in this one trade, both banks made this  astonishing discovery. The British bank realised  

play09:07

that they could have capital, which they couldn't  otherwise get because everyone was starved for  

play09:11

capital in the days after the Second World War  because there was so much destruction and so much  

play09:14

rebuilding that was required. And the Russian bank  realised it could charge a higher rate of interest  

play09:18

than it could in America, where there were strict  limits on how much interest you could charge in  

play09:22

the sort of post-war New Deal settlement in  the US. So, they discovered this loophole,  

play09:27

which is if you use dollars, the international  currency, which was super useful because you  

play09:32

could do everything with dollars outside  the US, you essentially had all the benefits  

play09:36

of the dollars and none of the downsides. And  essentially, they'd created a law-free space.  

play09:42

And they needed a word for this ‚Äď what do you¬† call a law-free space? Well, we have a concept¬†¬†

play09:46

of a law-free space, that's what it is on the  high seas. If you are outside the reach of land,  

play09:51

you are outside the reach of terrestrial law,¬† and we call that offshore ‚Äď literally off shore,¬†¬†

play09:55

you are away from shore. So this¬† is where ‚Äėoffshore‚Äô comes from. ¬†

play09:59

But this could have been just an oddity, one  single trade, two banks make a little bit of  

play10:03

money and everyone forgets all about it. But  then the next year, the Suez Crisis happens,  

play10:08

Britain attempts to assert itself as a vibrant  imperial power in an age when it no longer was,  

play10:14

is utterly humiliated in its attempts to regain  control of the Suez Canal, is forced by the  

play10:19

Americans who froze our assets in the way that the  Russians were worried, they essentially forced us  

play10:26

to back down because otherwise we were going to go  bankrupt. And in an attempt to limp on while this  

play10:31

crisis was going on, the British Treasury imposed  very strict restrictions on what could be done  

play10:35

with pounds. And all the remaining merchant banks  in the City of London who were already kind of  

play10:40

down to their last few pennies were suddenly  cut off from financing altogether. They were  

play10:44

going to go bust. What were they going to do?  Well, they discovered, as the Midland Bank had  

play10:49

the year before, that if they just used dollars,  they could do what they liked. Not only could they  

play10:54

do what they like, but all the restrictions  imposed by the British Treasury fell away.  

play10:58

And all the restrictions imposed by the Federal  Reserve fell away. And suddenly they had  

play11:03

strings-free, totally marvellous offshore capital  that they could do what they liked with. No taxes,  

play11:09

no restrictions, no regulations at  all, no capital reserve requirements,  

play11:13

nothing. Do what you like. And this is the moment that the  

play11:16

City of London is reborn. It goes from being  the engine of the British Empire to being the  

play11:21

engine of the financial elite ‚Äď whoever they are,¬† wherever they're from, whatever their wealth is,¬†¬†

play11:26

we will help you do what you like with it. This  is when butlering is born. It radically changed  

play11:32

the way the world works. It’s quite hard to get  your head around how this works now, because  

play11:38

there are no restrictions and interest rates when  you use dollars, you can charge whatever interest  

play11:43

rate you like. There are no restrictions on where  you can move pounds or dollars, you can move from  

play11:47

wherever you like. The reason why this is, is  because all of those restrictions became defunct  

play11:51

because of what London did. So the City of London  radically reengineered the financial architecture  

play11:57

of the entire world, and in whose interests? In¬† the interests of people who own capital ‚Äď rich¬†¬†

play12:03

people. Essentially, rich people had a problem,¬† they came to Butler Britain and said, ‚ÄėWe want to¬†¬†

play12:09

be able to move our money without restrictions,  what can you do for us?’, and Britain said,  

play12:13

‚ÄėVery good, Sir,‚Äô and sorted that out. And that's¬† the model for everything that came subsequently.¬†¬†

play12:19

Rich clients had problems ‚Äď journalists were¬† writing about them, people could see what they¬†¬†

play12:24

owned, and so on ‚Äď and we found a solution and¬† helped them at the expense of everyone else. ¬†

play12:31

ANDREW: One of the things which I found of  great value in the book was making the complex  

play12:36

understandable, even to the extent that I think  I understand what Eurodollars are now, which is  

play12:41

one of the things that we've been talking about.  Let’s talk about some of the cases that you  

play12:47

cover in the book. Another thing that really  interests me is that it’s not just in the UK,  

play13:00

but also the overseas territories where these  things were taking place. And often at the  

play13:05

instigation of an individual who had an idea  that something could be pursued here. You talk,  

play13:10

for example, about Gibraltar, and its move  to being a major centre for online gambling.  

play13:18

And it started with one betting shop and a  couple of people answering the phone. What  

play13:24

happened there and why did they move that way? OLIVER: It's a really important point that we're  

play13:29

not just talking about the UK here. Butler Britain  is the whole British archipelago, and there are  

play13:35

these little leftover bits of empire scattered  not quite all over the world but very widely.  

play13:42

And they tend to be the bits that were too poor  or too small or too remote to become independent.  

play13:48

So the British Virgin Islands, the Turks and  Caicos Islands, the Cayman Islands, Gibraltar,  

play13:55

and so on. And these places were very,  very small, as a rule very, very poor,  

play14:03

and very, very desperate for business,  for some form of revenue. And that's  

play14:08

a killer combination if you are a lawyer looking  for a way to help your client get away with  

play14:12

something, and Gibraltar’s transformation is a  fascinating one. And actually fascinating to me,  

play14:18

because I didn't go to Gibraltar to write this  story I wanted to write about a different story.  

play14:23

And I went there and realised that Gibraltar is  essentially the world's leading jurisdiction for  

play14:30

offshore gambling, and its impact on the world  of offshore gambling is immeasurable.  

play14:36

When I was a kid, and I'm sure many of the  people watching this can remember this,  

play14:40

betting shops were totally different to what they  are now. They were these very gloomy places with  

play14:44

whited-out windows. If you went in there, there  was no advertising. It was a bit like visiting  

play14:49

a prison in a way, it was so unattractive. And  that was how gambling was. It was very, very  

play14:55

closely regulated, and also very highly taxed.  Every single bet you made was taxed in the same  

play15:00

way that if you buy alcohol, every pint of beer  you buy is taxed, which made it very difficult  

play15:06

for betting shops to offer attractive rates,  which really restricted how much people gambled.  

play15:11

And what happened was that, essentially, one guy  initially in Gibraltar realised that because money  

play15:20

flowed freely between Britain and Gibraltar,  that if Gibraltar had no taxes on gambling,  

play15:26

then people from the UK could call up Gibraltar,  bet in Gibraltar and essentially on events which  

play15:32

are happening in the UK, and undercut bookies in  Britain. And this was only a small little idea and  

play15:37

never really amounted to very much apart from this  very small chain of betting shops in Gibraltar.  

play15:43

But then big British-based bookies realised  that if they put their telephone betting  

play15:48

operation in Gibraltar too, they could do  the same trick. And that essentially, within  

play15:55

six months, the entire British telephone gambling  operations of everyone, all the big bookies,  

play16:01

William Hill, Ladbrokes, everyone, they all moved  to Gibraltar, which caused a huge hole to appear  

play16:06

in the British government balance sheet. They  needed all these taxes that these people had  

play16:09

been paying. And it made it incredibly easy and  profitable for betting companies who didn't really  

play16:15

have to pay tax anymore. It's a big problem for  the British government. So in an attempt to get  

play16:18

them to come back, the British government  totally changes how betting is taxed, how  

play16:22

betting is regulated. So the reason why we have  this massive explosion of online gambling now,  

play16:26

where you practically can't turn on a TV without  being offered a free introductory offer for a  

play16:33

bet or whatever, this is all due to Gibraltar. And this is what I mean by the butlering industry.  

play16:40

Gibraltar offered this service to wealthy  companies, betting companies who had a problem,  

play16:47

they were being forced to pay these high rates  of tax and faced these high rates of regulation,  

play16:52

and by moving to Gibraltar, they could sidestep  all these regulations, and it offered them  

play16:57

a regulation-free space from which they could  then impose their will back on the UK, and win all  

play17:02

these concessions from the British government,  that no-one outside the betting industry was  

play17:06

demanding. There weren’t demonstrations on the  street saying give us lower taxes on betting,  

play17:11

give us regulation-free gambling, allow  a massive explosion of fixed odds betting  

play17:17

terminals or online roulette or whatever. It  was only in the interests of the big companies,  

play17:23

and they made an absolute fortune out of it.  It has been transformational for Gibraltar.  

play17:28

Gibraltar is now a very wealthy place. But  it's been disastrous for the UK, because we  

play17:34

now have these very high rates of gambling  addiction, far higher than we used to have.  

play17:39

And the entire debate is framed around  problem gamblers, when actually what we're  

play17:44

really talking about is problem companies,  right? The companies who moved to Gibraltar,  

play17:48

they're the ones to blame for what happened. And  yet, essentially, in order to try and accommodate  

play17:53

their will to try and gain some form of  tax revenue out of the gambling operations,  

play17:58

this was allowed to happen. Now, it didn't need to happen this way.  

play18:02

This is just in the weird structure of  what's left of the British Empire, whereby  

play18:07

these sorts of overseas territories ‚Äď they‚Äôre¬† colonies, really ‚Äď but overseas territories,¬†¬†

play18:12

they get to opt into which bits of British they  want to be. They say, yes, we want to be British  

play18:17

when it comes to being defended by the Royal  Navy. But we don't want to be British when it  

play18:20

comes to having the same tax rates as you or the  same transparency requirements as you or the same  

play18:25

police services as you. They get all the good bits  about being British with none of the downsides.  

play18:29

And that dynamic repeats itself in the British  Virgin Islands who have these notoriously opaque  

play18:34

shell companies, or in the Cayman Islands  who have this huge fund management industry.  

play18:39

It could theoretically repeat itself in the  Falkland Islands, it just hasn't happened there  

play18:43

yet, but there's no reason why it wouldn’t. And it’s a real problem. It means that unlike,  

play18:49

say, France, which still has remnants of  an empire too, but which all the bits of  

play18:53

empire are essentially parts of France, we  have multiple different bits of Britain,  

play18:58

all of which can play off against each other,  to the benefits of the wealthy people and the  

play19:05

harm of the rest of us. It should be said, this  isn't really a new thing. Two, three hundred years  

play19:11

ago, you used to get slavery in the Caribbean  colonies when you weren't allowed it in the UK.  

play19:15

There have always been differences in legislation  between the colonies and the metropolis, but  

play19:21

you really would have hoped we'd  moved on from that these days.  

play19:24

ANDREW: Even if you go to Jersey, you realise how  financial services are so much more important to a  

play19:32

place like that than they  have been for many years.  

play19:36

OLIVER: Absolutely. Jersey is a fascinating  example of a place that until the 1960s,  

play19:45

late 1950s, was dependent on agriculture,  because it's warmer than the UK, and tourism,  

play19:51

sort of. But essentially it wasn't a wealthy  place, it got along OK. But then it realised that  

play19:57

because it shared a financial space with the UK,  money could flow backwards and forwards freely,  

play20:03

but didn't share a tax regime with the  UK, it could just position as a tax  

play20:08

alternative to the UK ‚Äď stick your money there¬† and dodge taxes. If you can afford the fees,¬†¬†

play20:13

you don't have to pay the taxes. And that's  that the thing that Butler Britain offers,  

play20:17

right? It makes regulations or taxes essentially¬† voluntary ‚Äď if you can afford the fees, you can¬†¬†

play20:23

opt out of them. And then in order to chase those  taxes, you have the government tying itself in  

play20:29

all sorts of strange knots, like the non-dom tax  status that we've been hearing about recently  

play20:34

because of Rishi Sunak’s wife. But there are an  awful lot of other people who are also non-doms  

play20:39

who, because they would be able to afford to  opt out of taxes anyway, we've offered them this  

play20:44

really unconscionable loophole that is very  unfair, and really puts them at an advantage to  

play20:49

ordinary people. But essentially the government's  calculation is it's better to have some money than  

play20:53

no money, so let's just let them do that. ANDREW: I want to come back to that particular  

play20:57

point, but first some other case studies.  One that you've mentioned already,  

play21:01

but perhaps we could go into a little bit  more detail about it, because this is about an  

play21:06

American investment haven, is about the British  Virgin Islands (BVI). Tell us about that.  

play21:10

OLIVER: So the BVI is a gorgeous place. There  was a lot more travel that I wanted to do for  

play21:17

this book that I couldn't do because of lockdown.  But I did get to go to the BVI and I met the man,  

play21:22

Michael Riegels, who essentially invented  the British Virgin Islands shell company.  

play21:27

What was fascinating about the BVI is that  until the 1970s, it was an irrelevance. It was  

play21:36

by far the poorest British colony, it was  unknown, it was never discussed in the UK,  

play21:43

it only features in Hansard, the record of  parliamentary proceedings, in the context  

play21:48

of a joke ‚Äď anytime it was mentioned in a list,¬† some would make the same joke, which was ‚ÄėWhere's¬†¬†

play21:53

the British Virgin Islands? I don't know, but  it must be far from the Isle of Man, ha ha ha,  

play21:57

isn't it hilarious.’ And that would be the  joke. And it comes up again and again, well,  

play22:01

half a dozen times. But that's the only time it's  ever mentioned at all. But then, American lawyers,  

play22:08

fresh from having essentially moved their  financial operations to London to take  

play22:12

advantage of the Eurodollar market, were looking  for other loopholes that the British remnants of  

play22:16

the British Empire could offer. And they realised  that if they owned assets via a shell company in  

play22:22

the British Virgin Islands, it would help them  dodge American taxes because they could take  

play22:26

advantage of a treaty with the remnants of the  British Empire, which essentially turned American  

play22:32

investors into foreign investors so  they could gain rights that foreigners  

play22:36

had. This didn't last very long, because the US  Treasury got fed up and cancelled the treaty.  

play22:41

But then the same US lawyers, in coordination  with this very small number of lawyers who were  

play22:48

working in the BVI, realised that though they  couldn't do this trick on the Americans anymore,  

play22:53

because the Americans wouldn't put up with it,  they could still do it on the rest of the world.  

play22:56

So they wrote this law. You hear about lobbying.  This is taking lobbying to a new degree. The law  

play23:03

was written in total lockstep between BVI-based  lawyers, US lawyers and the government lawyer,  

play23:10

the Attorney General, in the BVI. They wrote  this law which created this utterly opaque  

play23:14

shell company, which then was used by anyone  to do anything that they wanted to hide.  

play23:20

The Panamanian drug smugglers who had been kicked  out of Panama ended up using these companies.  

play23:27

Ethnic Chinese businesspeople from Hong Kong who  were scared about the handover back to Chinese  

play23:32

control that was coming up, they moved to the  BVI. Politicians from Sub Saharan Africa or South  

play23:40

America who wanted to hide the assets they've  stolen from their people, they use the BVI. It's  

play23:45

a totally equal opportunity approach ‚Äď anyone¬† gets to buy these companies. But what's really¬†¬†

play23:51

interesting is all the BVI is doing is offering a  legal structure. It isn't doing anything else. And  

play23:57

yet it's brought in huge wealth. The BVI has gone  from being a place that was reliant on subsistence  

play24:03

agriculture 45 years ago to a place that has  a living standard that's now the equal of the  

play24:09

average in Europe. And that's only from selling  legal protection for foreigners who could afford  

play24:15

our services. It's a fascinating place. This was essentially a discovery of American  

play24:23

lawyers who realised they could do something,  and then when that loophole was closed,  

play24:26

the realisation and the initiative that,  well, that loophole has closed, but look,  

play24:32

we can create our own loophole, and that loophole  can be far bigger. And through that loophole,  

play24:36

anyone can come and hide their wealth free  from the scrutiny. To the great detriment of,  

play24:42

for example, the people of Angola, whose  governments have hidden all this money  

play24:46

that they've stolen from them in BVI companies.  Or Tanzania. And one of the great ironies is that  

play24:52

the man who invented the BVI company, Michael  Riegels, was from Tanzania. A Brit who grew up  

play24:59

in Tanganyika, as it was then called, didn't like  the post-colonial government, ended up living in  

play25:04

Britain for a while, didn't like it here, moved¬† to the BVI, and then his invention ‚Äď obviously,¬†¬†

play25:10

it's not his fault that this happened ‚Äď but his¬† invention was then used by politicians in Tanzania¬†¬†

play25:15

to defraud their own government. So it is a  great irony and a great sadness, to be honest.  

play25:21

ANDREW: And coming to the UK, there are two things  I wanted to talk about. The first is the Scottish  

play25:28

limited partnerships, and this was a quite a  remarkable little case study, I thought.  

play25:33

OLIVER: Yes, I mean, the  Scottish limited partnership is  

play25:37

this awesomely obscure wrinkle in British  legislation. One of the weird things about Britain  

play25:46

is that we just keep adding layers of legislation  to things. We don't really get rid of the old  

play25:52

things. Things will exist as a kind of zombie,  a legal zombie out there somewhere. And one of  

play25:58

the most profitable aspects of butlering is people  essentially digging through this sort of muck heap  

play26:04

of British legislation and finding things that  still function but are essentially defunct.  

play26:09

Scottish limited partnerships throughout the  twentieth century were largely used, in as  

play26:14

far as they were used at all, to regulate Scottish  agricultural tenancies. Maybe half a dozen of them  

play26:18

created a year. And they're a form of partnership,  like a doctor's partnership or whatever, but they  

play26:26

give you a bit of limited liability. And because  they're Scottish, as opposed to English or Welsh,  

play26:31

they can own property. It's a legal irrelevance  until it's discovered in the 1990s by some genius  

play26:39

Eastern European money launderer who realised  that these things are totally opaque, totally  

play26:44

tax free and can own property and move money  out of the former Soviet Union by the billion.  

play26:50

And they do. They are used to defraud Moldova  of 15 per cent of its GDP, probably the biggest  

play26:57

bank heist relative to the size of the country  where it took place, ever. They’re used to move  

play27:02

hundreds of billions of dollars via banks in¬† the Baltic states ‚Äď Danske Bank and Swedbank¬†¬†

play27:06

and ABLV and so on ‚Äď huge money laundering¬† scandals on behalf of the elite in Moscow. ¬†

play27:13

But what's particularly disturbing about this  story is that after the scandals were exposed,  

play27:20

there was a sustained campaign by Scottish¬† politicians ‚Äď particularly Roger Mullin,¬†¬†

play27:24

who was an MP from the Scottish National Party,  because it was a real stain on Scotland's  

play27:28

reputation that Scottish limited partnerships were¬† being used in this way ‚Äď there was a real campaign¬†¬†

play27:32

in Parliament at Westminster to have this loophole  closed. And it failed. His campaign failed.  

play27:40

And the reason it failed is that it wasn't just  money launderers who were using Scottish limited  

play27:45

partnerships. They were also a preferred vehicle  for private equity to hold their assets within.  

play27:52

And private equity liked them for the same reason¬† that money launderers did ‚Äď they were opaque, they¬†¬†

play27:56

were very cheap to set up, and they were very,  very tax light, shall we say, euphemistically.  

play28:03

And so essentially, out of concern for  maintaining business in the City of London,  

play28:09

private equity business, the Treasury refused  to put fresh regulations on SLPs. In fact, they  

play28:16

deregulated them further in response to  the scandal. And so what we see is that  

play28:24

the government was putting the interests of the  people who move money in the City of London ahead  

play28:29

of the interests of the victims of corruption in  Moldova, Russia, Ukraine and elsewhere. People  

play28:37

who were having their entire livelihood stolen  from them were of no consequence at all when set  

play28:42

against a very small increase in regulation for  private equity companies in the City of London.  

play28:48

And that is kind of a dark calculation in and of  itself, this sort of amorality of it, but also,  

play28:57

as it turned out, incredibly short-sighted. What we're seeing now in Ukraine  

play29:02

is the consequence of having empowered that  corruption for so long. The regime that has  

play29:07

been created in the Kremlin is a kleptocracy  that has essentially become so voracious in its  

play29:19

disregard for any kind of international rules,  and so enriched by all the money that this very  

play29:24

small number of people has been able to steal  from Russia and neighbouring countries, that  

play29:28

it's just totally unwilling to abide by any rules  at all. And so the invasion of Ukraine, this sort  

play29:33

of insistence that they're above and beyond any  conceivable law, has been enabled by Britain.  

play29:40

These kleptocrats, the oligarchs in Russia,  what are they good at? Well, they're good at  

play29:45

killing people, stealing stuff, invading  countries. They're not good at integrating wealth  

play29:49

into a globalised financial economy. That's what  we've done for them. We've sold them the shell  

play29:55

companies, we've sold them the legal services,  we've sold them the wealth management solutions,  

play30:00

the reputation management solutions, all of  the corruption solutions which are required  

play30:05

if you've got stolen money and you want to  be able to behave like an aristocrat instead  

play30:08

of an oligarchy. We've done that for them. Obviously the decision to invade Ukraine is on  

play30:16

Putin and his close advisers, and on them alone.  And obviously, the war crimes and the blame for  

play30:22

that is only on the people who committed those war  crimes. But the system that was able to do that,  

play30:28

that's on us. And I don't think in all the  discussion about Ukraine that there has been  

play30:32

sufficient recognition of our role in that, and  the urgency of closing the loopholes and ending  

play30:40

the systems that allowed that to happen. ANDREW: And there's a strong Ukraine connection  

play30:44

with the final area that I want to discuss  with you that you cover in the book, which is  

play30:50

what you talked about earlier, about the sale  of the Brompton Road former Tube station to  

play30:55

Dmitry Firtash, who has been called Putin's  man in Ukraine. Take us through that.  

play31:05

OLIVER: The key lever that Russia has used to  control and corrupt Ukraine since the end of  

play31:13

the Soviet Union has been its control of the gas  trade. The Soviet economy, of which Ukraine was of  

play31:19

course a part, was very dependent on cheap  gas. That gas comes primarily from Russia,  

play31:24

or if not from Russia, through Russia. And  therefore, Ukraine, post-independence, needed gas  

play31:29

from Russia if it was to keep its heavy industry  going. That lever was something that Russia,  

play31:35

particularly once Vladimir Putin became in charge,  was very willing to pull in order to make changes  

play31:41

happen in Ukraine. He needed a local business  partner to work with, to make that happen, and the  

play31:47

man he chose was Dmitry Firtash, who became a key  ally, and a billionaire. He became extremely rich  

play31:53

from essentially becoming Putin's business  partner, Gazprom’s business partner in Ukraine.  

play32:01

And what did he do with the money? Well, he  could have spent it in Ukraine, but there  

play32:04

isn't very much to buy. It isn't a particularly  developed economy. So he brought it to the UK.  

play32:10

It is astonishing, the extent of his social  rise from so obscure no one even knew what  

play32:16

he looked like in 2006, to by 2011, he has  given a lot of money to Cambridge University,  

play32:22

he's hanging out with the Duke of Edinburgh, he  got to meet him and was welcomed into the Guild  

play32:26

of Benefactors of Cambridge University. He set  up a British Ukrainian society with members of  

play32:31

the House of Lords and Commons on the board to  promote Ukrainian history and ideas and so on  

play32:39

in Britain, but essentially largely to be able  to promote himself. He bought himself a mansion  

play32:45

in Knightsbridge about, I suppose, three minutes’  walk from Harrods, up for about £60million.  

play32:53

He got to open trading on the London Stock  Exchange. He had an event in parliament where he  

play32:58

met the speaker of parliament, John Bercow. And¬† then the culmination of his social rise ‚Äď when¬†¬†

play33:03

the crisis in Ukraine broke out in 2014, and  kind of what we have now is a continuation of it,  

play33:09

he goes into the Foreign Office to advise them on  what to do about Putin. This is Putin’s business  

play33:15

partner advising the Foreign Office on what to do  about Putin, which is kind of extraordinary.  

play33:20

But then in February 2014, he closes the deal,¬† the real summit of his achievement in the UK ‚Äď he¬†¬†

play33:27

bought a Tube station from the Ministry  of Defence. It was a closed Tube station,  

play33:31

but it's still got all the platforms and the  shafts and everything. It still looks like a Tube  

play33:35

station. You can see it, it's actually right next  door to his mansion. Again, just down the road  

play33:39

from Harrods. It's got all that kind of slightly  weird burgundy, glazed tiles that you get on Tube  

play33:43

stations. He is, as far as I know, the only  private owner of a Tube station in London.  

play33:51

We were so keen that he bought it that actually he  got a special deal. He only had to pay a third of  

play33:55

the price up front. It's a deal that’s normally  designed to encourage social housing. But he was  

play34:00

allowed to take advantage of it to essentially  get a mortgage from the British government to  

play34:03

buy property from the British government. But then, two weeks after he bought the Tube  

play34:08

station, his world comes crashing down. Because  there is another approach to extremely wealthy  

play34:15

billionaires who have made vast quantities  of money from working with Vladimir Putin,  

play34:20

which is the American approach. The FBI  became concerned by the origin of his fortune,  

play34:25

concerned particularly with a business deal he had  done in India to try and get hold of titanium, and  

play34:31

investigated him and indicted him on corruption  charges. He has been in Vienna ever since battling  

play34:37

extradition to the United States. So he has  never done anything with the Tube station. The  

play34:42

Tube station remains unaltered now to how it was  in 2014. He's not able to occupy that beautiful  

play34:47

mansion in Knightsbridge. He's just sitting there  in Vienna battling extradition to the US.  

play34:52

And I think that is the distinction,  the crucial distinction between  

play34:56

the US approach ‚Äď I‚Äôm not saying the US is¬† perfect in its approach to billionaires;¬†¬†

play35:00

I don't think anyone would argue that - but there  is an approach where you have law enforcement who  

play35:06

proactively investigates the origins of wealth,¬† and they say, ‚ÄėHang on, there's something off¬†¬†

play35:11

here,’ and they investigate it and they do work  to try and expose it, as opposed to what we do,  

play35:16

which is to say, ‚ÄėYep, yeah, money, yep, bring¬† it in. What would you like to buy? Here you go,¬†¬†

play35:21

here's the bill of fare. Here's the list  of services we can offer to you.’  

play35:29

What I would like above all ‚Äď there are many¬† things I would like to happen ‚Äď but above all,¬†¬†

play35:35

I would like our law enforcement agencies  to be resourced and empowered to operate  

play35:39

like the FBI did in relation to Dmitry  Firtash. Instead of just bringing money here,  

play35:45

we investigate where it comes from, and if¬† it's corrupt ‚Äď and he hasn't been convicted,¬†¬†

play35:50

perhaps he'll never be extradited, perhaps¬† he will be acquitted ‚Äď but if it's corrupt,¬†¬†

play35:55

that money is investigated and confiscated and  returned to the people who it was stolen from.  

play36:00

ANDREW: Just coming on to some of the solutions  to these issues, you've talked about one there  

play36:08

which is about the need to resource properly  those who investigate and those who prosecute  

play36:16

these activities. And I think it was remarkable  reading in the book how poorly resourced  

play36:23

they are here, compared to the United States. OLIVER: It's extraordinary, to be honest. There  

play36:33

are many disturbing lines in the 2020 reports  from the Intelligence and Security Committee  

play36:40

of Parliament into Russian interference  in the UK, particularly in the light of  

play36:44

what's since happened in Ukraine. And  particularly in the knowledge that at the time,  

play36:49

Boris Johnson, our prime minister, tried to  suppress the report and when it was published,  

play36:52

dismissed it as some kind of anti-Brexit  thing, which is absurd, it really wasn't.  

play36:57

But one of the most disturbing lines comes from  the director of the National Crime Agency. When  

play37:01

asked why the National Crime Agency doesn't¬† go after oligarchs she replied, ‚ÄėWell, we are¬†¬†

play37:06

bluntly concerned about the impact on our budget.’  That is absurd, right? We are a G7 country. Yes,  

play37:14

we have many problems, but the idea that our law  enforcement agencies are having to look down the  

play37:19

back of the sofa to try and dig up the pennies  they can find to take on oligarchs… Oligarchs  

play37:24

are going to defend their wealth with everything  they've got. And if you don't take investigating  

play37:28

it as seriously as they're going to take defending  it, you're never going to win. And that is a real  

play37:32

problem that we have, and it's chronic. National Crime Agency officers are paid  

play37:38

less ‚Äď significantly less ‚Äď than their colleagues¬† in the Metropolitan Police. This is supposed to¬†¬†

play37:43

be the elite. This is supposed to be Britain's  FBI and yet it's not being funded like that.  

play37:49

The Serious Fraud Office is the same. It always  struggles to win cases because it doesn't have the  

play37:54

resourcing it needs. And the same is true all the  way down. This isn't just a question of battling  

play37:59

top-ranked kleptocrats, billionaires.  This is about ordinary fraudsters,  

play38:04

common or garden fraudsters who are taking  30 grand, 40 grand from a pensioner in a  

play38:10

push payment fraud, one of the really awful crimes  which just ruin someone's life but the police  

play38:16

don't have the time or resources to investigate.  They happen all the time and they're just ignored  

play38:21

it. All down the scale, from the very top to the  very bottom, financial crime is under-resourced,  

play38:29

under-investigated. And that's a political  decision, because we have made a decision  

play38:34

as a country that there is more money to be made  by having an unregulated or deregulated financial  

play38:42

services industry than there is to be made in  investigating financial crime properly. And  

play38:48

it's presented, or has been presented for a long  time, as all upside. Yes, the City of London is  

play38:55

booming. But there is a significant downside.  There are victims in this country, the victims  

play39:00

of fraud, and above all, there are victims  overseas, and they are the victims of corruption  

play39:03

in Russia or in Angola, Malaysia, you name it.  Those people, their politicians bring their money  

play39:10

here and they buy property here. And that's  really not a good way of making a living.  

play39:15

ANDREW: You talked about the Scottish journalist  who had done work to expose that the Scottish  

play39:28

problem that we talked about earlier, and yet he  isn't a journalist now… Well, he's certainly not  

play39:34

employed full time on the newspaper, because  newspaper journalism is in decline.  

play39:39

OLIVER: It's a real issue. I mean, obviously  journalism is in decline everywhere because of  

play39:46

the changing business model and so on, and that's  something that we need to find a way of solving.  

play39:53

But there is also a separate problem, which is  that because of the way British defamation law  

play39:59

works and, increasingly worryingly, British data  protection law works, it's incredibly hard to  

play40:05

write about wealthy and powerful people, because  they have this full arsenal of weaponry to,  

play40:13

if not defeat journalists in defamation or  data protection cases, tie them up in these  

play40:19

legal costs, which go into the tens of thousands  or hundreds of thousands. My friend, Catherine  

play40:25

Belton, who is a good friend from when I lived in  Moscow, wrote this brilliant book, Putin’s People.  

play40:29

She was sued by five oligarchs simultaneously.  And eventually her publishers had to settle  

play40:35

because they were already £2.5million in the hole  and they were looking at potential legal costs  

play40:39

of £10million if they carried on. HarperCollins  can’t deal with it. Imagine what that does for the  

play40:45

Glasgow Herald, which is the employers of David  Leask, who did so much brilliant work to expose  

play40:50

Scottish limited partnerships. They can't afford  that kind of cost. The Western Mail here in Wales  

play40:57

or the Yorkshire Evening Post in Yorkshire, once  sort of mighty regional or local newspapers, they  

play41:05

don't have a chance taking on these people. It's  a real problem, because without good journalistic  

play41:12

work, law enforcement don't have the raw material  that they need to have suspicions to open  

play41:17

investigations. And then without those law  enforcement investigations, journalists  

play41:21

in turn don't have stuff that they can write  about. So you end up with this vicious circle,  

play41:24

where, because it's so easy for oligarchs to  suppress publications about them, no information  

play41:31

comes out. Because no information comes out,  there are no investigations. Because there are no  

play41:35

investigations, no information comes out.  And we need to try and change that round.  

play41:39

Another change, another reform I would  really like to see is what's called an  

play41:44

anti-SLAPP law. A SLAPP is an American concept,  strategic litigation against public participation,  

play41:51

which is essentially an abuse of the legal process  to shut down civil society or shut down journalism  

play41:59

or whatever, not because you expect that  you can win but because you want to tie  

play42:02

them up in legal knots so they go away.  And it would be really transformational  

play42:08

if we could have a rule that essentially said that  early on in any defamation case or data protection  

play42:15

case, the judge could just say, ‚ÄėNo, this is¬† of public importance. And this stops now.‚Äô ¬†

play42:22

By all means, if two footballers’ wives want to  sue each other about what someone did or did not  

play42:26

say on Instagram, by all means spend tens  of millions if that's what you want to do.  

play42:31

But if a journalist or civil society organisation  is revealing information about grand corruption  

play42:36

and it's so important that it gets exposed, they  need to have protection from these incredible  

play42:42

costs that can be dumped on them by the very  wealthy. For the very wealthy these costs are a  

play42:49

rounding error in their fortunes, but for a media  organisation scraping by it's existential.  

play42:55

ANDREW: And action needs to be, very clearly from  your book, at the government level, at the legal  

play43:02

level, as you’ve said. I also think there's a  responsibility on the part of organisations to  

play43:09

question more. You mentioned Cambridge University  and the donation that they were given, a very  

play43:14

substantial donation, and you look at the kind  of mess now, although it's being resolved slowly,  

play43:21

that a lot of cultural organisations got into over  taking the Sackler money, and now rapidly removing  

play43:29

the name Sackler from a lot of the galleries. OLIVER: Absolutely. There is, obviously,  

play43:35

a duty on all of us to have this sort of moral  compass about where money comes from. But I  

play43:42

think, for too long, the government has put all  the weight on the private sector to police itself.  

play43:51

And to be fair, there are some organisations  that are doing a very good job of policing  

play43:56

themselves and are turning away this money. I know  universities who have been offered substantial  

play44:01

grants by Russian oligarchs and have said, ‚ÄėNo,¬† we won't take that kind of money.‚Äô But the problem¬†¬†

play44:05

is that for them at the moment, it's all… yes,  they can feel warm and virtuous about how good  

play44:11

they are, but it must be incredibly frustrating,  right? If you're trying to run a university or  

play44:15

a cultural institution, and you turn away the  money, and then the organisation just over  

play44:19

the street takes the money and they then get the  fancy new laboratory or the wonderful new gallery  

play44:26

or whatever, because, essentially, there's no  downside to taking the money, right? I mean,  

play44:30

eventually, you might get exposed and told off  about it. But let's face it, more often than not,  

play44:34

that doesn't happen. So the pressure is  always to loosen the restrictions, because  

play44:42

there's no upside to not loosening them. We need the private sector and academia and  

play44:48

cultural organisations and so on to have really  strong moral values about taking this money.  

play44:52

But that needs to be policed as well, because we  need to have a system whereby if you transgress  

play44:57

those moral values, you need to be picked up on  and prosecuted and investigated for doing that.  

play45:02

And that's what's currently not happening. At  the moment, all the big banks, or the big law  

play45:08

firms or whoever, are expected to have these  strong compliance departments and to spend all  

play45:11

this money on compliance. But if they don't, does  anyone really notice? Honestly, not really. So  

play45:21

the bad guys need to be disciplined, and that will  reward the good guys for doing the right thing.  

play45:26

ANDREW: Just finally on that, the role of the  Bank of England. You talk in the book about  

play45:33

a lack of intellectual curiosity in the  Bank. Do you think that's changing?  

play45:36

OLIVER: That has changed. The Bank of England is a  far more professional and mighty organisation than  

play45:43

it used to be? It is. But reading about what  it was like at the beginning is fascinating,  

play45:48

absolutely fascinating. The idea that this  organisation that was central to the financial  

play45:54

architecture not just to Britain but, to be¬† honest, of the world ‚Äď it was then and it remains¬†¬†

play46:00

one of the great central banks. And yet it was  run by this tiny elite from the City of London,  

play46:07

all of them male, all of them privately  educated, none of them university educated.  

play46:12

They all knew each other ‚Äď they often came from¬† the same families. And yet they had this total¬†¬†

play46:18

control and oversight over financial industry  up into the 1980s. And that was the problem.  

play46:26

If I had a time machine, right, and I could go¬† back in time and do things ‚Äď I mean, you know,¬†¬†

play46:32

there's a lot that you could do ‚Äď but the thing I¬† would probably do most of all would be to go back¬†¬†

play46:37

to the Labour government when it nationalised  the Bank of England and say, it isn't enough  

play46:41

to nationalise the Bank of England ‚Äď you need¬† to totally change everyone who runs the Bank¬†¬†

play46:45

of England. Because had they done that, had they  brought in a new kind of people to run the Bank of  

play46:52

England ‚Äď intellectually curious, outward looking,¬† reflective of the whole of Britain, rather than¬†¬†

play46:58

just the tiny elite of the City of London ‚Äst then offshore never would have happened. And if¬†¬†

play47:03

offshore never would have happened, Britain never  would have become a butler in the first place.  

play47:06

And the world would be so different to  how it is now. And so the original sin  

play47:13

is the Bank of England. It's changed,  and yes, it's a different place,  

play47:19

but that problem persists, and solving it is  now the challenge that we have ahead of us.  

play47:25

ANDREW: And one thing that I was very taken¬† by as well was the call at the end ‚Äď in¬†¬†

play47:31

your notes of the book, in fact ‚Äďabout¬† having a much more critical approach to¬†¬†

play47:36

empire and learning about empire. OLIVER: Yes, it's been  

play47:43

really interesting how there is now more  discussion of empire than there certainly  

play47:48

has ever been that I remember. A lot of that  is full credit to Sathnam Sanghera and William  

play47:53

Dalrymple, who have written these really  excellent books. Sathnam Sanghera’s,  

play47:59

obviously, Empireland, and William Dalrymple,  a number of books but his one particularly on  

play48:03

the East India Company is extraordinary. But the response to them I find very dispiriting,  

play48:11

to be honest. The Empire was many, many things,  obviously, but above all it was a business,  

play48:20

right? People didn't travel halfway around the  world in order to conquer some territory just  

play48:25

for the sake of conquering the territory. They  went there in order to make money. And Britain  

play48:30

made a huge amount of money out of the rest of the  world by essentially acting as an oligarch and we  

play48:37

need to recognise that. We need to recognise  what we did, where our wealth comes from. And  

play48:44

the fact that this has become distilled to ‚Äď I¬† mean, you're in Bristol, you know this more than¬†¬†

play48:48

anyone ‚Äď it's been distilled to a debate around¬† statues is so frustrating because the statues¬†¬†

play48:54

are just an expression of something. It's like  talking about it only by talking about statues is  

play48:58

like some cargo cult behaviour. It's very weird.  That's just an expression of something else.  

play49:04

And the lack of debate around empire  in the curriculum. I studied history,  

play49:10

obviously, at school, at secondary school, and I  did a history degree at university. The only time  

play49:17

I studied the Empire was at A-Level because I had  an Irish teacher and we had a module on the late  

play49:24

nineteenth-century history of Ireland. The Parnell  period of the Irish nationalist campaign for a  

play49:30

free state. That was it. Because we had an Irish  teacher and he was interested in that, and he was  

play49:35

inspirational. I never studied India, I never  studied Kenya, I never studied Hong Kong, never  

play49:40

studied the Opium Wars, none of it. Instead, we  studied Henry VIII and the Second World War.  

play49:47

Nothing Britain ever does will be as  interesting as the fact that it used to  

play49:51

rule a quarter of the world's population. They  used to own India. That's extraordinary. And  

play49:59

it's not wrong to look into that, to investigate  it. That's what all sensible countries should be  

play50:05

doing. And there is a weird ‚Äď I've always¬† felt this actually, I lived in Moscow for¬†¬†

play50:11

many years ‚Äď and I've always felt there's a¬† slightly strange parallel between the Russian¬†¬†

play50:18

failure to confront its own history and Britain's  failure to confront its own history. It is,  

play50:23

I think, far less pernicious in this country,  in that we're not doing what Russia does. But  

play50:28

there is still a kind of willful amnesia about  empire. And the butlering industry that I write  

play50:36

about grows directly out of empire. There's this  quote, you referenced it at the very beginning of  

play50:43

our chat, from Dean Acheson, the former Secretary  of State in the United States, who said in 1962,  

play50:51

‚ÄėBritain has lost an empire and not yet found a¬† role.‚Äô And it was it was a comment that really¬†¬†

play50:55

stung and it had a huge resonance in the UK, and  people became very angry about it. But Britain  

play51:00

had already found a role. Britain was already  by that point the offshore services centre,  

play51:04

it had become a butler already. Britain lost  an empire and became a butler. And there's been  

play51:13

very little debate about the butlering role, and  very little debate about the Empire. And then I  

play51:18

think there should be more debate about both. ANDREW: I would certainly  

play51:22

agree with all of that. Just finishing off,  one of the reasons that this book is timely  

play51:29

is because of the invasion of Ukraine. Do  you think this is going to be the wake-up  

play51:37

call that will make change  happen? Are you confident?  

play51:42

OLIVER: There will be change as a result. I've  had a lot of contacts with officials about, for  

play51:52

example, better protections for journalists who  write about corruption, and I'm really confident  

play51:57

that something will come of that. There has been  already an Economic Crime Act. It's very weak  

play52:04

and insubstantial, but still it exists since the  invasion of Ukraine. We are promised another one,  

play52:10

and hopefully that will happen, let's see.  But I don't really think of this as a problem  

play52:16

that can be solved just like that. I have a very good friend in Ukraine. She's  

play52:22

actually currently in Warsaw but she's Ukrainian,  called Darya Kalanick, who is an incredibly brave  

play52:28

anti-corruption activist. You may have seen when  Boris Johnson did a press conference in Warsaw,  

play52:32

he got harangued by a Ukrainian woman ‚Äď that's¬† Darya, she is fearless. And I once asked her how¬†¬†

play52:38

she didn't get dispirited in investigating and  exposing corruption, because she'd been doing  

play52:43

it for so long and so little changed. And she said  that she doesn't think about it like that at all.  

play52:49

She says, ‚ÄėIn Ukraine, we're at four per cent¬† of where we need to be. And my job is to get¬†¬†

play52:54

us to five. If I can get us to five, I’ll  look around and decide whether I carry on.’  

play52:58

And I think thinking about trying to get  to 10 per cent is so dispiriting and so  

play53:02

overwhelming. But if you break the task down into  little chunks then it's much less daunting.  

play53:09

So there has already been a degree of positive  change because of what's happened in Ukraine.  

play53:16

It seems weird to look for silver linings in  such a horrible dark cloud. But there has been  

play53:20

a recognition of our role in moving this  wealth. The sanctions have been good,  

play53:25

and it's good that that's happened. It's good  that there's been the Economic Crime Act with a  

play53:30

bit of exposure of offshore-owned property.  It is good that there is now debate about  

play53:36

helping journalists expose corruption. And it's  good that they're talking about a much better  

play53:40

economic crime bill which will regulate Companies  House, for example, which is a massive problem.  

play53:46

And all of these steps taken together, we might be  at four per cent, we might be at ten per cent. But  

play53:51

if all those come together, maybe we'll get  to 20. And that's good. And then we need to  

play53:55

talk about resourcing the police and so on,  and that will make the big difference.  

play53:58

So I sort of think about it more  incrementally, because otherwise you just get  

play54:01

dispirited. I did a talk in a school a few  years ago. I often reference this because it  

play54:09

remains the best question I've ever been asked.  There was a kid who'd been sitting at the back  

play54:14

when I was talking to this classroom, staring  at me suspiciously and slumped in his chair.  

play54:20

And at the end, the teacher was like, ‚ÄėSo that's¬† it,‚Äô and I thought, ‚ÄėGood, I can escape. Speaking¬†¬†

play54:24

at schools is terrifying.’ And eventually, this  kid very slowly put his hand up and was, like,  

play54:28

‚ÄėHere, mister, if you know all this about money¬† laundering. Why don't you just go and do it?‚Äô¬†¬†

play54:34

And I've thought about that question ever since,  like, why not, right? I think the reason is  

play54:41

because I'm an optimist. And I think the world  would be better without money laundering. And if  

play54:46

I engage in money laundering that will mean there  will be more money laundering, so if I don't,  

play54:50

and instead use my knowledge of money laundering  to expose it and hopefully persuade other people  

play54:53

not to engage in it, then the world will be a  better place. So that's the way I look at it.  

play55:00

Be an optimist and try and expose what's happening  and hopefully that means there'll be less of it,  

play55:06

and the world will tomorrow  be better than it is today.  

play55:10

ANDREW: Well, really important points to finish  on. Thank you very much, Oliver, for joining us  

play55:16

today. Butler to the World is published by Profile  Books and is available in all bookshops now. We do  

play55:22

urge you to read it ‚Äď it's an important book¬† with lots of lessons and is critical to all¬†¬†

play55:28

our futures. Thank you very much for watching and  thank you very much again, Oliver. Thank you.  

play55:33

OLIVER: Thank you very much for  having me. It's been a joy.

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